Correlation Between Entra ASA and Electromagnetic Geoservices
Can any of the company-specific risk be diversified away by investing in both Entra ASA and Electromagnetic Geoservices at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Entra ASA and Electromagnetic Geoservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entra ASA and Electromagnetic Geoservices ASA, you can compare the effects of market volatilities on Entra ASA and Electromagnetic Geoservices and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Entra ASA with a short position of Electromagnetic Geoservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entra ASA and Electromagnetic Geoservices.
Diversification Opportunities for Entra ASA and Electromagnetic Geoservices
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entra and Electromagnetic is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Entra ASA and Electromagnetic Geoservices AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromagnetic Geoservices and Entra ASA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Entra ASA are associated (or correlated) with Electromagnetic Geoservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromagnetic Geoservices has no effect on the direction of Entra ASA i.e., Entra ASA and Electromagnetic Geoservices go up and down completely randomly.
Pair Corralation between Entra ASA and Electromagnetic Geoservices
Assuming the 90 days trading horizon Entra ASA is expected to generate 3.21 times less return on investment than Electromagnetic Geoservices. But when comparing it to its historical volatility, Entra ASA is 2.35 times less risky than Electromagnetic Geoservices. It trades about 0.02 of its potential returns per unit of risk. Electromagnetic Geoservices ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Electromagnetic Geoservices ASA on September 14, 2024 and sell it today you would earn a total of 44.00 from holding Electromagnetic Geoservices ASA or generate 27.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entra ASA vs. Electromagnetic Geoservices AS
Performance |
| Timeline |
| Entra ASA |
| Electromagnetic Geoservices |
Entra ASA and Electromagnetic Geoservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entra ASA and Electromagnetic Geoservices
The main advantage of trading using opposite Entra ASA and Electromagnetic Geoservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entra ASA position performs unexpectedly, Electromagnetic Geoservices can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Electromagnetic Geoservices will offset losses from the drop in Electromagnetic Geoservices' long position.| Entra ASA vs. Gjensidige Forsikring ASA | Entra ASA vs. Storebrand ASA | Entra ASA vs. Olav Thon Eien | Entra ASA vs. DnB ASA |
| Electromagnetic Geoservices vs. Prosafe SE | Electromagnetic Geoservices vs. TGS NOPEC Geophysical | Electromagnetic Geoservices vs. SeaBird Exploration Plc | Electromagnetic Geoservices vs. BW Offshore |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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